Sunday, July 22, 2012

"The Unimportance of Practically Everything"

For years I though it was just me thinking that the HBR was only used by
high-buck consultant's to stroke CEO's egos, telling them how smart the
CEO was to hire said HBR-spouting consultant.
From Felix Salmon at Reuters...

Once in a while though...

In horse racing 60% of the purse goes to the winner, 20% to the 2nd place finisher and lesser amounts to 3rd through 5th. Does this mean the first place finisher is three times as good as 2nd? Of course not, it's usually fifths of a second that separate the two. In sealed-bid contracting 100% of the contract goes to the better (usually low) bidder while second place goes back to the office with nothing. Again, how much better was first over also-ran?

This division of the spoils isn't confined to business. In life the reward for being second is not much better than for being one of the pack.

From the Harvard Business Review:

A friend of mine is the Executive Director for an organization with global reach. He is intelligent and driven, but constantly
distracted. At any given time he will have Twitter, Gmail, Facebook and
multiple IM conversations going. The majority of them are useful in
some way. Yet, in the back of his mind, he knows there are more
important deliverables to get to. But the days slip by and he finds
himself working all weekend to catch up. Staying up Sunday night until
the early hours of Monday morning has become his modus operandi.
He told me, while checking his Blackberry again, that it results in
having no social life. It's so bad that he tried having his Executive
Assistant pull all of the internet cables on his computer. But there
were still too many ways to get online. When he was struggling to
complete a particularly big project, his brother took away his
Blackberry and left him at a motel with no internet access. Yet, even
there, he still found a workaround within 10 minutes using his ancient
Nokia phone to check his email. Eventually, after eight weeks of almost
solitary confinement, he was able to get the project done.

Why do otherwise intelligent people find it so easy to be distracted from what really matters?

Social media did not create the problem of distraction, but it is clearly an amplifier. Indeed, a study [PDF] by Clifford Nass et al. at Stanford showed that heavy media multitaskers are more
susceptible to interference from irrelevant environmental stimuli than
light media multitaskers. Heavy multitasking may encourage even heavier
multitasking because it leads to a "reduced ability to filter out
interference." Could the part of our brain that is processing deeper
cogitative thought actually be atrophying in the process?

None of this would matter if activity and reward were linearly
related. But we live in a world where almost everything is worthless and
a very few things are exceptionally valuable. This is a
counterintuitive idea. After all, the idea that 50% of results come from
50% effort is appealing. It seems fair. Yet, research across many
fields paints a very different picture.

As far back as the 1790s, Vilfredo Pareto observed this nonlinear pattern in Italy, where he found that 80% of the land was owned by 20% of the people. Much later, Joseph Moses Juran, one of the fathers of the quality movement, called the insight the "Pareto Principle" and applied it beyond economics. In The Quality Control Handbook,
Juran called it "The Law of the Vital Few." His observation was that
you could massively improve the quality of a product by resolving a tiny
fraction of the problems. He found a willing audience in Japan, where
the country had been producing low-cost, low-quality goods. By adopting
the quality processes, the phrase "Made in Japan" gained a totally new
meaning. And gradually, the quality revolution led to Japan's rise as a
global economic power....MORE.